LTC Properties(US:LTC)2026-02-25 17:02Financial Data and Key Metrics Changes - The company reported a Core FFO per share improvement of $0.05 to $0.70, representing an 8% increase year-over-year, and Core FAD per share improved by $0.07 to $0.73, reflecting an 11% increase [17] - The debt to annualized adjusted EBITDA for real estate was 4.5x, with an annualized adjusted Fixed Charge Coverage Ratio of 4.4x, well within the stated leverage target of 4-5x [17] Business Line Data and Key Metrics Changes - The SHOP portfolio grew to 25% of the investment portfolio by year-end 2025, with expectations to reach 45% by the end of 2026 [4] - The original 13 properties converted to SHOP grew NOI by 22% over 2024 pro forma NOI, generating $16.2 million in combined rent and NOI in 2025 [8] - The company anticipates 14% NOI growth at the midpoint for the full year 2026 over pro forma 2025 [8] Market Data and Key Metrics Changes - The company expects occupancy to grow by approximately 150 basis points in 2026, with RevPAR projected to increase by about 5% [9] - The company is in a competitive senior housing acquisitions environment, leveraging its smaller asset base and relationship-driven strategy to find opportunities [12] Company Strategy and Development Direction - The company is transforming from a lower growth triple net REIT into a faster-growing SHOP-focused REIT, with a guidance of $600 million in acquisitions for 2026, nearly 70% higher than 2025 [3] - The strategic portfolio transformation aims to reduce skilled nursing investments to less than 30% by the end of 2026, focusing on SHOP growth [5] - The company plans to continue investing in newer SHOP communities that are best positioned to compete against future developments [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial strength to support SHOP growth, with liquidity standing at $810 million on a pro forma basis [16] - The company anticipates continued accelerated internal and external growth powered by SHOP in 2027, following the completion of its transformation at the end of 2026 [5] - Management highlighted the importance of operator relationships in driving future growth and emphasized the potential for organic NOI growth to double by the end of 2026 compared to pre-transformation levels [20] Other Important Information - The company has an acquisition pipeline of over $500 million in deals under review, all focused on SHOP [13] - The company expects to sell five skilled nursing properties and has certain loan payoffs totaling $90 million in the next 60 days [10] Q&A Session Summary Question: What are the greatest threats to SNFs today? - Management noted that private capital driving prices in skilled nursing could change, and there is inherent risk in the skilled nursing sector [26] Question: Is the 14% same-store growth sustainable? - Management indicated that the pro forma occupancy of 89.7% is close to stabilized levels, and they are comfortable with the guidance for growth [27] Question: What are the year one yields for SHOP investments? - The company is underwriting year one yields at about 7%, with good growth headroom beyond that [40] Question: How competitive is the landscape for seniors housing deals? - Management acknowledged the competitive landscape but emphasized their ability to find transactions that meet their underwriting criteria [51] Question: What is the expected CapEx burden for LTC going forward? - Management stated that the current CapEx guidance is based on a $1,500 per unit assumption, which is appropriate given the age of the assets [75]